Types of Companies in Singapore - Professional Incorporation Services
Types of Companies in SingaporeUpdated on Friday 09th February 2024
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Foreign investors have several options to choose from when establishing a company in Singapore. The decision will usually be made by taking into account tax considerations and the requirements when opening certain types of companies.
Foreign investors may choose between the simplest partnership forms and other complex structures such as local private companies, local public companies, companies limited by shares, companies limited by guarantee. Our team can help you start a branch in Singapore and a representative office. Professionals may also decide to set up sole traders in Singapore.
How to determine the type of structure for your Singapore company
The first step to take when starting a business in Singapore is to decide the type of company one wants to employ. In order to do that, one must know from the beginning how many owners or shareholders the company will have, as the Singapore Commercial Law provides for types of companies suitable for both small and large numbers of shareholders.
The initial share capital of the company must also be taken into account upon registration. Planning ahead is essential, as no good enterpriser would start a business without a goal.
This is why it is very important to find out as much as possible about the best business forms for your future company in Singapore and this is also why professional help is advised. Moreover, our attorneys in Singapore can provide you with information about the advantages of each type of company.
Partnerships in Singapore
Foreign businessmen can open partnerships in Singapore that are divided into 3 types, as follows:
- limited partnership;
- limited liability partnerships.
Investors must know that partnerships and limited partnerships in Singapore are not considered legal entities. There is a legal difference between these 2 types of partnerships and our team of lawyers in Singapore can help you better understand which one is suitable for your business plans.
The simplest way to describe a partnership is that it is a business venture that is set up by a minimum of 2 partners. According to ACRA, the partnership (the simple one) can be incorporated by partners who can be a legal entity, an individual or a limited liability partnership (LLP).
There are specific differences between these 2 types of partnerships, as for the limited partnership (also set up by at least 2 partners), the partners can be an individual or a company, and one of the partners is a general partner and the other, a limited partner.
The common characteristics of the 2 partnerships are:
- they are not considered separate legal entities, therefore there isn’t any difference between the partners and the business;
- they can’t own property in their own name;
- they can’t sue a third party and a third party can’t sue the partnerships, they need to sue the partners;
- the partners are liable for the debts of the partnerships with their personal assets.
Limited liability partnerships are considered corporate entities and can count up to 20 partners in Singapore. The liability of the partners is limited to the amount of money they have contributed with at the registration of the partnership. In order to register a company, you can request the legal services of our attorneys in Singapore.
In other words, the LLP retains the main characteristics of a partnership, while combining the basic characteristics of a limited liability company. Other important aspects concerning the LLP are presented below, with the help of our Singapore law firm:
- the LLP is incorporated by at least 2 founders, who have the quality of partners;
- the LLP needs to have 1 manager who has his or her residency in Singapore;
- the appointed manager must have an age of minimum 18 years old;
- for the registration of the LLP, investors must pay a fee of $115;
- the registration application formalities can be completed in 15 minutes and the entire procedure can be completed in minimum 14 days to maximum 60, provided that the approval of other institutions is necessary.
Local companies in Singapore
According to ACRA, there are 7 types of companies that can be incorporated in Singapore, as follows:
- unlimited companies – 3 types – the unlimited private company, the unlimited exempt private company and the unlimited public company;
- public companies – 2 types – the public company limited by shares and the public company limited by guarantee;
- private company – 1 type – the private company limited by shares;
- exempt company – 1 type – exempt private company.
Companies in Singapore may be registered according to the provisions of the Companies Act that requires at least one resident director.
Companies limited by shares may be 100% foreign owned. The number of shareholders in private limited companies is 50. Another type of Singapore company, similar to the private limited company, is the exempt entity that must have at most 20 members, none of them a corporate body.
Public companies can be set up as companies limited by shares that may have over 50 members. This type of Singapore company must register with the Accounting and Corporate Regulatory Authority (ACRA) before trading its shares on the stock exchange.
Singapore companies limited by guarantee are usually incorporated as non-profit organizations (NGOs). For any of the company types registered here, we can help foreign investors when applying for permanent residence in Singapore. Clients may request the help of our law firm in Singapore in order to decide the best business form for their operations.
Please verify the main conditions imposed for a company type, as the rules can vary and this can affect the process of immigration to Singapore when starting a business.
What are the rules for appointing directors and other management personnel in Singapore?
For all the company types presented above – the ones that are corporate entities (the 7 types presented earlier), the company’s founders must appoint directors and company secretary. The director requirements in Singapore impose the following:
- the director of the company must be a resident in Singapore;
- he or she must have an age of minimum 18 years old;
- he or she must have full legal capacity;
- the person can be a Singapore citizen, a Singapore permanent resident or a foreigner who has received an Employment Pass.
Our law firm in Singapore can help foreign investors in the process of completing visa formalities for foreigners who will be employed in this country, regardless of their function in the company (top management, executives, and others who need to obtain a residence permit in Singapore).
Another important function that must be occupied in a corporate structure is the one of the company secretary. Legal entities must appoint 1 company secretary in a period of maximum 6 months since the incorporation date. Provided that a period longer than 6 months has passed, the company’s director can be charged with a fine of $1,000.
We invite you to request more details concerning other aspects of the incorporation of any corporate entity, partnership or other type of legal structure that can be set up here.
Global Investor Program in Singapore
Investors interested in immigration to Singapore for the purpose of starting a business can also participate in the Global Investor Program. Those who will participate in this program must pay a processing fee of $10,000 (this is the fee charged starting with 1 April 2020). Investors participating in this program will be able to relocate here with their close family members.
If you want to arrive in this country in order to set up a business, you are invited to address our immigration lawyers in Singapore and they can handle all the legal matters that are of importance prior to your arrival in this country. All aspects concerning immigration can be dealt with through the assistance of our law firm, which also includes preparing the visa application file.
If you arrive here through the Global Investor Program you will need to pay additional fees, besides the registration fee imposed by the program. For instance, when you will apply for a residence permit in Singapore, you must pay a processing fee of $100. This is the standard fee charged to all persons who will apply for a residence permit, regardless of the reason of arrival.
Other types of Singapore companies
Other types of companies available for registration in Singapore are the subsidiary, the branch office, the representative office and the sole proprietorship. The subsidiary can be set up as a private limited company in which the main shareholder is a foreign company.
The subsidiary is the most employed type of business vehicle by small and medium-sized enterprises. The Singapore branch office is registered as an extension of the parent company and it is not a separate legal entity. The Singapore representative office has no legal status and is registered only for marketing or research purposes.
The sole trader is the simplest form of doing business in Singapore and is not considered a legal entity. For information about the requisites for opening a company you can contact our lawyers in Singapore.